1. Consumer Behavior & Marketing Management
Chapter 1
Consumer Behavior & Marketing Management

2. Chapter Spotlights Consumer benefits Total product concept
Market segmentation and segmentation strategies
Positioning
Consumer decision-making
Engel, Kollat, and Blackwell (EKB) Model

3. Course Objectives
Better understand why people do what they do in the marketplace when they do it
Better understand yourself as a shopper, buyer, and consumer
Improve yourself as a shopper, buyer, and consumer
Improve your current/future job performance
Better understand marketer communications and behaviors in the marketplace

4. Consumer Benefits
People do not buy products or services, they buy benefits
Hence we make purchases not for the products themselves, but for the benefits of the problems they solve or the opportunities they offer
e.g., “always late” so a watch helps solve problem; has stopwatch feature so now can keep track of “work out” times

5. Consumer Benefits Consumers seek bundles of types of benefits:
Tangible benefits: e.g., a watch keeps good time; has leather band
Intangible benefits: e.g., the “reliability” reputation of the watch manufacturer; the image of the watch wearer

6. The Total Product Concept
Total product: refers to the sum of benefits offered by a product, service, outlet, etc.
Basic core: bundle of utilitarian benefits (e.g., design, features, etc.)
Accessory ring: added-value benefits with no apparent extra cost (e.g., store reputation, manufacturer prestige, convenient location, etc.)
Psychological ring: benefits resulting from the consumer’s feelings associated with owning/using the product (e.g., belonging, youthful, powerful, sexy, etc.)
Time: products/service “give” or “take” time; this can be “good” or “bad” (e.g., fast food versus conventional restaurant)

7. Market Segmentation
Market segmentation is the study of the marketplace in order to discover already existing viable groups of consumers who are similar or homogeneous in their approaches to choosing and/or consuming goods and services.

8. Segment Bounding
Segment bounding is a means by which marketers differentiate among consumers and among market segments
Determine the “descriptors” of the consumers/units in the segment (e.g., demographics, psychographics, benefits sought, product usage rate, type of retail outlet, etc.)
Determine specific “geographic location” of segment
Bound segments in “time” to ensure that all data is relevant and up to date for the time of use.

9. Segment Viability
Four factors are used to assess segment viability. Viable segments are:
Of sufficient size
Measurable
Differentiated
Reachable

10. Segmentation Strategies
Mass marketing (undifferentiated marketing): offering the same product to the entire consumer population
Concentrated marketing (focused or niche marketing): selecting one market segment, even though the product may also appeal to others
Differentiated marketing: selecting two or more different segments

11. Segmentation in the Global Marketplace
There are two approaches to market segmentation
Localization: treating each country as a separate market and seeking consumer segments accordingly
Intermarket segmentation (also called “standardization”): selecting groups of consumers who exhibit similar consumption behavior across different countries
Marketers emphasize similarities rather than differences across country markets

12. Consumer Benefits and Product Positioning
Product positioning is the placement of a product, service, outlet, etc. in the mind of the consumer
There are five ways used to position products, services, outlets, etc.
On perceived benefits
On image
On attributes
Against competitors
Combination of two or more of the above
Repositioning: shifting position in the consumer’s mind through changes in important product, price, distribution, and promotional and/or personal selling benefits.

13. The Consumer Decision-Making Process
A consumer decision model is a means of describing the processes that consumers go through before, during, and after making a purchase (choice).
A model shows the causes or antecedents of a particular behavior and each of its results or consequences.

14. Engel, Kollat, and Blackwell (EKB) Model
The EKB model is comprehensive and shows the components of decision making and the relationships and interactions among them.
The five distinct parts of consumer decision making presented are:
Input, information processing, a decision process, decision process variables, and external influences

15. Input
Input includes all kinds of stimuli from our contact with the world around us:
Our experiences, contact with others
Marketer-controlled stimuli (e.g., advertising, store display, demonstrations)
Other stimuli (e.g., personal recollections, conversations with friends)
External search

16. Information Processing
Stimuli are processed into meaningful information
Five methods of information processing:
Exposure
Attention
Comprehension
Yielding
Retention

17. Decision Process
It is triggered at any time during information processing
It consists of five steps:
Problem recognition
Search
Alternative evaluation
Choice
Outcomes (post-purchase evaluation and behavior)

18. Decision Process Variables
Those individual qualities that make people/consumers unique.
Decision process variables include
Motives
Beliefs
Attitudes
Lifestyles
Intentions
Evaluative criteria
Normative compliance and informational influence
Other aspects of self

19. External Influences
Such influences are called “Circles of Social Influence.” They are: culture, sub-culture (co-culture), social class, reference groups, and family or household influences